Stone Shi rages at Majoro, CBL over wool and mohair payments

By Sunday Express On Mar 21, 2020

Managing Director of the wool centre Stone Shi

CBL denies delaying payments to farmers

Mohalenyane Phakela

CONTROVERSIAL businessman Stone Shi has blamed his failure to pay wool and mohair farmers for their produce on the Central Bank of Lesotho (CBL)’s failure to speedily process money paid into his account by international buyers.

His claims have however, been denied by the CBL which insists that it is “only a banker and fiscal agent of the government of the Kingdom of Lesotho” and not private entities like Mr Shi’s Maseru Dawning Trading company.

The CBL said since it does not have any accounts for private companies and does not process any payments for them, it was therefore inaccurate and misleading for Mr Shi to blame them for delays in paying the wool and mohair farmers for their produce which his company sold on their behalf to international buyers.

Mr Shi’s Maseru Dawning Trading company controls the Lesotho Wool Centre (LWC) in Thaba Bosiu which until recently, had the monopoly to sell wool and mohair to international buyers on behalf on the local farmers.

However, there have been numerous delays in paying the farmers their dues from the sale of their produce in the 2018/19 farming season. Following bitter complaints by the farmers, Finance Minister Moeketsi Majoro announced in his 26 February 2020 budget speech for the 2020/21 fiscal year that the government had set aside M8 million to pay the 1000 farmers owed by Maseru Dawning.

But Dr Majoro’s offer to bail him out was immediately rejected by Mr Shi who claimed he did not need any government loans as he had enough money in his account held at the CBL to pay the farmers. He claimed that international buyers had deposited the equivalent of M13 million which was more than enough to pay the farmers and all that was needed was for the CBL to speedily process the payments made into his company’s account to enable him to pay the farmers.

According to Mr Shi’s 5 March 2020 letter to Dr Majoro, one of the international buyers, SDIC, paid the equivalent of M10 million into Maseru Dawning’s CBL account on 24 and 25 February 2020.

“On 24 February 2020, the sum of U$450 708, 25 was paid to Central Bank by SDIC who are the buyers of clients’ wool and mohair and this money was paid to Maseru Dawning for the wool bought and that money converted to our local currency is just below M7 million,” Mr Shi states in his letter.

“On 25 February, another payment came to Central Bank and this time it was U$192 339, 50 from the same buyer for the same purpose and this amounts to about M3 million. This means that on 25 February 2020, Maseru Dawning had around M10 million in the Central bank planned for the payment of farmers.

“It is assumed that as the Minister of Finance and knowing a crisis into which the delayed payment of farmers had plunged their industry, the fact that payments had been made into Central Bank must have been brought to your (Dr Majoro) attention. This is a very important fact. Be as it may, during your budget speech in parliament on 26 February as well as at the dinner in the evening of the same day on radio and television interviews, you failed to tell the nation that Maseru Dawning now has this amount of money in the Central Bank to pay farmers.

“It was your obligation as Minister of Finance to tell this to the nation just as it was in the national interest to tell the nation that the government will lend Maseru Dawning money to pay Basotho farmers. As you might be aware, it stands to reason that many Basotho are angry about this proposed loan, asking a legitimate question as to why the government has to give money to Maseru Dawning to pay farmers? Why can’t Maseru Dawning pay the farmers from the sales of their produce?

“It is submitted that if you (Dr Majoro) had told Basotho this very important issue in respect of the money that was already at Central Bank, you would not have had to say to Basotho that the government will lend Maseru Dawning this money. The first question is why did you not tell Basotho this important matter?”

In the same letter, Mr Shi blasted the CBL for delaying to clear the payments. He said it normally took an hour for money paid through the CBL to be cleared but the 24 and 25 February 2020 payments by SDIC to Maseru Dawning were only cleared on 27 February.

“It usually takes one hour to convert US Dollars to Maloti and have it accessible to the client. This time around, the money which had arrived on 24 and 25 February only got to be cleared on 27 February around 3pm.

“We find this strange that in this serious crisis, a solution in the form of the money meant to pay the farmers, which money is not a government loan, would take so long to clear and thus delay the payment to farmers. This is a very sorry state of affairs for which your (Finance) ministry must apologise to the farmers for the delay in dealing with their payments.

“It is once again enquired from you as the Minister of Finance, to whom the Central Bank is accountable for its activities, why this money was not cleared as per normal and standard operating tradition, that is, within the usual one hour to allow quicker facilitation of payments to the farmers,” Mr Shi states in his letter.

In its Friday media statement, the CBL said, “Following the continued allegations over the media blaming the Central Bank of Lesotho for the delayed payments of wool and mohair farmers by the Maseru Dawning Trading Company (Thaba-Bosiu Wool and Mohair Centre), the Bank wishes to reiterate its position that:

It is only a banker and fiscal agent of the Government of the Kingdom of Lesotho.
It does not have an account for the above-mentioned company or any other private entity, hence it is not involved in the processing of any payments for anyone except the Government of Lesotho.

“Members of the public are, therefore, kindly advised that it is and will be inaccurate and misleading for any individual or private company to blame the Bank for its delayed or failure to fulfil its financial obligations to their respective clients or customers”.